Business Context and Reporting Period
This Form 8-K filing by Becton, Dickinson and Company (BD) is dated July 28, 2009. The report primarily serves to announce the issuance of a press release on July 30, 2009, detailing financial results for the third fiscal quarter ended June 30, 2009. Additionally, the filing documents amendments to the company's By-Laws effective July 28, 2009.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it outlines the methodology for presenting non-GAAP financial measures in the accompanying press release (Exhibit 99.1). Key metrics discussed include:
- Revenues: Presented at constant foreign exchange rates to exclude currency fluctuation impacts.
- Selling and Administrative Expense: Adjusted to exclude charges related to pending antitrust class action settlements.
- Operating Income: Adjusted to exclude the aforementioned antitrust settlement charges.
- Income Taxes and Effective Tax Rate: Adjusted to exclude antitrust charges and tax benefits from various tax settlements.
- Income from Continuing Operations: Adjusted for antitrust charges and tax benefits.
- Earnings Per Share (EPS): Diluted EPS from continuing operations is presented excluding antitrust charges and tax benefits.
Material Changes and Unusual Items
The filing highlights specific items that management excludes from non-GAAP measures to better reflect underlying operational performance:
- Antitrust Settlement Charge: A charge related to the pending settlement of certain antitrust class action suits impacted reported selling and administrative expenses, operating income, and income from continuing operations for the second quarter and first six months of fiscal 2009.
- Tax Settlement Benefits: Tax benefits relating to various tax settlements impacted reported income taxes and effective tax rates for the third quarter of fiscal 2009.
- Foreign Exchange: Fluctuations in foreign currency exchange rates are excluded from revenue growth rate calculations to facilitate period-to-period comparisons.
Guidance, Outlook, and Corporate Governance
Management Commentary: Management utilizes these non-GAAP measures for internal evaluation, budget planning, and to provide investors with insight into underlying performance. The filing explicitly states that non-GAAP results should not be considered in isolation or as a substitute for GAAP results.
By-Law Amendments: On July 28, 2009, BD amended its By-Laws to:
- Authorize the chairman or shareholders to adjourn a shareholders meeting regardless of whether a quorum is present.
- Establish a procedure for selecting an acting chair of a board committee meeting in the absence of the appointed chair.
- Implement certain technical and corrective changes.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated July 30, 2009) for specific GAAP and non-GAAP financial figures, as this 8-K filing only describes the methodology.
- Verify the magnitude of the antitrust class action settlement charge and its specific impact on Q2 and YTD 2009 results.
- Assess the details of the tax settlements providing benefits in Q3 2009.
- Confirm the impact of foreign exchange rates on reported revenue growth versus constant currency growth.
- Review the full text of the amended By-Laws (Exhibit 3.1) for implications on shareholder meeting procedures.